Being a cryptocurrency trader is a fairly new trading path. As such, it can be quite a challenge to get a grip on your trading routine.
Our next 5 habits will help you get settled in this new industry!
1. Check the news regularly
Cryptocurrencies are infamous for being affected by news. With forex trading, you can get away with ignoring most of the news. Cryptocurrency trading does not have that luxury.
It is vital that you keep up with the news. The cryptocurrency market is still in its infancy.
ETF proposals and future options are being brought forward quite frequently.
It is important for you to know when such a proposal will be looked at, as well as just knowing in general what is going on with the market.
Even seemingly small decisions will have an impact on price. If you’re not aware of them, you might be entering trades at the wrong time or in the wrong direction.
Don’t get caught by surprises!
Not just that, but cryptocurrencies are easily influenced by the overall sentiment. When you see articles praising cryptocurrencies or articles demonising them you’ll also notice a change in prices.
Be aware of these changes in sentiment and you might just catch a nice trade you wouldn’t have otherwise!
We’d recommend you check the news at least 3 times a week. You should be able to find some resources that will give you a quick overview of what is happening in the cryptocurrency world!
2. Keep up with the big exchanges
Just like the news, decisions made by big exchanges will have an effect on your trading.
Some exchanges will be just that – an exchange. But others, like coinbase for example, will also have a broker branch.
They might decide to add new cryptocurrencies to their portfolio, or make a crypto/fiat pair available that you have been dying to trade!
Other exchanges might decide to add a broker branch, or brokers might decide to also open up as an exchange.
A few of these decisions will be big news. However, smaller things like adding new pairs won’t be.
This is why it’s important to keep an eye out for these announcements. Of course, you don’t need to check every single one of them.
But, we suggest you keep up with the exchanges and brokers that have the most influence on the cryptocurrency market.
Some of their decisions could also affect movement in the market, so there’s no excuse not to!
These decisions could spike a crypto’s value, which could result in a lost trade or even a winning tade!
3. Keep up to date with broker fees
We’ve mentioned this a million times by now, but the cryptocurrency market is a new market.
Many brokers, especially forex brokers, are still figuring out their fee structure for cryptocurrency trading.
What could be a low spread one week, could suddenly turn out to be a high spread the next!
It’s a good idea to keep an eye out for the brokers that have competitive spreads! You might be able to switch to a broker with much better spreads or fees than the one you are currently using.
And as we’ve discussed in this article, broker fees are something you really need to take into account when live trading!
4. Fill in your trading journal
This might seem like an obvious one, but you will be surprised how little people actually do this!
We cannot stress enough how important it is to have – and fill in – a trading journal. You will be able to see your growth, your mistakes, and you’ll have all this data in one place.
Do not underestimate the power of all of this data!
If you want cryptocurrency trading to become a source of income for you – whether this is your main source of income or just a side income – you need to fill in your trading journal.
You can start off with just a basic one, but once you start going over everything you will notice it’s missing information. Adjust your journal to your liking – just make sure you use it!
We’ve already done some of the work for you, check out our trading journal here.
It’s important to evaluate your results. You can’t just trade and not check in with how you are doing. You’ll need to know if you are profitable, at the least!
It is up to you how often you want to evaluate your progress. We recommend you do a full evaluation every six months. It will be enough time for you to accumulate a nice amount of data!
This is also the perfect time to think about your trading in general.
Ask yourself the following questions :
Are you on track to reach your goal?
Is this strategy working for you?
Does the cryptocurrency market appeal to you?
Do you need to change anything about the way you work?
Don’t be afraid to do a smaller scale evaluation more frequently though! If you feel like something simply isn’t working, you don’t need to stick to it for six months just to evaluate it.
Feel free to look over your trades every month and see what’s working and what isn’t!
Evaluating is an important step in becoming a successful cryptocurrency trader, and it’s important to try and make it a habit!
Want more? Check out our 5 steps to becoming a successful cryptotrader for extra tips!